Greece, what the fuck?

[Jokodo]

<snip>According to polls the support for "no" votes on the initiative were very much from the young and the elder demographics were very strong for "yes".<snip>

I wouldn't call a 45/55 split among the 65+ generation a very strong yes vote, only relative to the 85/15 split among 18-24 year olds.

http://www.publicissue.gr/en/2837/greek-referendum-2015-no-voter-demographics/

 

[Jayjay]

If as first step Greece is going to default or cut down on pensions and wages anyway, which were the only sticking points with the eurozone, what reason would Greece has to turn down the free bailout money? They could always default after they run out.

They have already defaulted on debt payments, I believe.

The IMF payment that was due July, sure. But IMF for its reasons doesn't call it "default", but "arrears". So if there is an agreement today, it's entirely possible that IMF will get its money. As for the EU, Greece hasn't even started paying them back so it is premature to call it default.

Anyway I don't disagree with you regarding the pensions. My point was that if Greece doesn't want to accept the Troika's terms, they could always default. But what lumpenproletariat was suggesting that they both default and accept the main points of contention, which is to cut wages and pensions. That's the worst of both worlds...

 

[dismal]

They have already defaulted on debt payments, I believe.

The IMF payment that was due July, sure. But IMF for its reasons doesn't call it "default", but "arrears". So if there is an agreement today, it's entirely possible that IMF will get its money. As for the EU, Greece hasn't even started paying them back so it is premature to call it default.

Anyway I don't disagree with you regarding the pensions. My point was that if Greece doesn't want to accept the Troika's terms, they could always default. But what lumpenproletariat was suggesting that they both default and accept the main points of contention, which is to cut wages and pensions. That's the worst of both worlds...

There are milder technical defaults, covenant defaults, etc. which you can try to dismiss but not making a scheduled debt payment sure looks like a default even if you choose to play semantic games and call it a ham sandwich.

 

[Horatio Parker]

The IMF payment that was due July, sure. But IMF for its reasons doesn't call it "default", but "arrears". So if there is an agreement today, it's entirely possible that IMF will get its money. As for the EU, Greece hasn't even started paying them back so it is premature to call it default.

Anyway I don't disagree with you regarding the pensions. My point was that if Greece doesn't want to accept the Troika's terms, they could always default. But what lumpenproletariat was suggesting that they both default and accept the main points of contention, which is to cut wages and pensions. That's the worst of both worlds...

There are milder technical defaults, covenant defaults, etc. which you can try to dismiss but not making a scheduled debt payment sure looks like a default even if you choose to play semantic games and call it a ham sandwich.

Not a dismissal, just accurate. They're not in default until they're declared in default, which AFAIU isn't until they're 30 days overdue.

The way things look now, I don't think anyone expects that Greece won't be in default, but they aren't yet.

 

[dismal]

There are milder technical defaults, covenant defaults, etc. which you can try to dismiss but not making a scheduled debt payment sure looks like a default even if you choose to play semantic games and call it a ham sandwich.

Not a dismissal, just accurate. They're not in default until they're declared in default, which AFAIU isn't until they're 30 days overdue.

The way things look now, I don't think anyone expects that Greece won't be in default, but they aren't yet.

OK, fine. I can't see any particular reason to argue about this.

 

[ksen]

Greece is solvent but illiquid: Policy implications

^This article argues that greek doesn't have a debt sustainability problem it has a liquidity problem.

Greece’s debt is 180% of GDP, which seems to make it insolvent without large primary surpluses. This column argues that since restructuring lowered the interest burden to just 2% of GDP, Greece is solvent – or would be with nominal GDP growth of just 2%. The ECB’s misdiagnosis has caused an unnecessary banking crisis. The solution is to accept that Greek debt is sustainable, so the austerity programme can be relaxed and liquidity support provided to the Greek banking sector.

 

[DrZoidberg]

Anyone care to speculate on significance of Varoufakis's resignation? He did say before the referendum that he'd resign if Yes votes win, so it is a bit surprising that he quit regardless.

I have some inside information. He´s a very arrogant and self centred guy. He will be in whatever spot gets him the most fame. He´s also very intelligent. As far as he is concerned he has succeeded with what he wanted Greece to do. He has no more to do there in his opinion. What is required now is to ride the crisis out, and less clever people than him can do that just fine. But most importantly, it´ll be a bunch of drudgery and penny pinching. That bores him. He´s a "big plans" kind of guy. There´s no shortage of people who want to hire him now. He has proved that he can get things done. And he does have a book deal, and he does want to write a book about this. Not so much for the money. He just loves to see his name in print. He´s a very vain guy.

A friend worked with him when he was a lecturer of economics at Stockholm university. Apparently an exceedingly good mathematician. But obnoxious. He loooooooves himself.

 

[fromderinside]

Varoufakis smoochie, er, smoothy, er, final result for pi.

 

[Jayjay]

The EU leaders are a bunch of softies. It seems that they've got no plan B for the contingency that Greece doesn't accept their terms, and Greece knows this. It also appears that the Greek government has no problem letting their own country fall into chaos, because they know the people will blame Europe for whatever happens.

What the eurogroup should start seriously discussing is how to prepare for Greece default and subsequent dismissal from Euro. As long as Greece doesn't think that this option is on the table, it has no reason to change its attitude.

 

[dismal]

It seems that they've got no plan B for the contingency that Greece doesn't accept their terms

Plan B is they keep their money and their jobs.

 

[Jayjay]

It seems that they've got no plan B for the contingency that Greece doesn't accept their terms

Plan B is they keep their money and their jobs.

Their jobs are safe, and the money is gone either way. Either they give it to Greece formally, or they use it to patch up Greece after the rioting wrecks the country and threatens to spill to other EU countries. That's not much of a plan B.

 

[Tom Sawyer]

Plan B is they keep their money and their jobs.

Their jobs are safe, and the money is gone either way. Either they give it to Greece formally, or they use it to patch up Greece after the rioting wrecks the country and threatens to spill to other EU countries. That's not much of a plan B.

Why don't they just build a big wall around Greece?

 

[dismal]

Plan B is they keep their money and their jobs.

Their jobs are safe, and the money is gone either way. Either they give it to Greece formally, or they use it to patch up Greece after the rioting wrecks the country and threatens to spill to other EU countries. That's not much of a plan B.

The old money is probably gone either way. Any new money is only gone if they let Greece have more money.

In any case, this is not so much about money for the Europeans, it is about precedent and domestic politics. If they concede to the Greeks they risk countries that they actually give a shit about asking for concessions as well, and empowering the opposition in those countries, as well as pissing off voters at home.

- - - Updated - - -

Their jobs are safe, and the money is gone either way. Either they give it to Greece formally, or they use it to patch up Greece after the rioting wrecks the country and threatens to spill to other EU countries. That's not much of a plan B.

Why don't they just build a big wall around Greece?

That's kinda what they did two bailouts ago. They built a big financial wall so it's collapse wouldn't matter much.

 

[Jayjay]

Their jobs are safe, and the money is gone either way. Either they give it to Greece formally, or they use it to patch up Greece after the rioting wrecks the country and threatens to spill to other EU countries. That's not much of a plan B.

Why don't they just build a big wall around Greece?

Because euro or not, Greece is still part of EU.

 

[fromderinside]

Why don't they just build a big wall around Greece?

Because euro or not, Greece is still part of EU.

Maybe someone should point out to Germany that Great Britain is part of the EU. Then point out EU still works without GB using the Euro.

Greece. Float your currency. EU don't back Greece's debt with euro. Debt will be written down in an eye blink.

 

[Togo]

Their jobs are safe, and the money is gone either way. Either they give it to Greece formally, or they use it to patch up Greece after the rioting wrecks the country and threatens to spill to other EU countries. That's not much of a plan B.

The old money is probably gone either way. Any new money is only gone if they let Greece have more money.

Meh, the new money is to pay off the interest on the old money. The creditors are sitting around discussing whether to lend more money to Greece to pay back the money they already owe. It's not like they actually hand over anything, since they're just paying the money to themselves on Greece's behalf.

In any case, this is not so much about money for the Europeans, it is about precedent and domestic politics. If they concede to the Greeks they risk countries that they actually give a shit about asking for concessions as well, and empowering the opposition in those countries, as well as pissing off voters at home.

If they don't, they risk a different precedent - that the Euro economies are not acting a guarantors for each other as promised, and that there is an upper limit on how much protection they receive. Which makes Portugal, Italy, Spain and Ireland more vulnerable, and permanently weakens the Euro as a currency.

It's just a matter of which precedent they choose.

Because euro or not, Greece is still part of EU.

Maybe someone should point out to Germany that Great Britain is part of the EU. Then point out EU still works without GB using the Euro.

Rather better than it does if we were to use the Euro.

Greece. Float your currency. EU don't back Greece's debt with euro. Debt will be written down in an eye blink.

That is the advantage of exiting the euro. Because it's such an obvious option though, it seems unlikely that they could do that and still maintain full trade relations with the EU.

 

[whichphilosophy]

The EU leaders are a bunch of softies. It seems that they've got no plan B for the contingency that Greece doesn't accept their terms, and Greece knows this. It also appears that the Greek government has no problem letting their own country fall into chaos, because they know the people will blame Europe for whatever happens.

What the eurogroup should start seriously discussing is how to prepare for Greece default and subsequent dismissal from Euro. As long as Greece doesn't think that this option is on the table, it has no reason to change its attitude.

In their wettest of dreams, the EU finance committees never dreamed of the problems Greece would be facing, no matter what the circumstances. I don't think that it is much comfort that Russia and China are hovering around with a possibility to assist. Payment can be substituted in part in kind

The previous Greek government ran the finances like a credit card and simply borrowed to maintain government spending. Other countries have problems.
Italy is poor but its workers also work long hours. In many of the companies I visit I find they start around 08.00 am and finish 18.00 or 19.00 hours. Some managers are working late at night. I know this because I received email replies as late as 01.00 am. There is very little variety of foreign goods in the Italian shops (compared to the UK). Income tax, VAT and Social security payments to the Government by employers are all at the high end.

Many live with their parents even when married.

 

[dismal]

The old money is probably gone either way. Any new money is only gone if they let Greece have more money.

Meh, the new money is to pay off the interest on the old money. The creditors are sitting around discussing whether to lend more money to Greece to pay back the money they already owe. It's not like they actually hand over anything, since they're just paying the money to themselves on Greece's behalf.

Recall the current dispute is over whether Greece continues with fauxsterity or goes back to big budget blowouts. It's been in all the headlines. It's going to take new money to fund the fauxsterity, since there is no surplus that actually shows up as cash, and even more new money to fund the return to big budget blowouts.

In any case, this is not so much about money for the Europeans, it is about precedent and domestic politics. If they concede to the Greeks they risk countries that they actually give a shit about asking for concessions as well, and empowering the opposition in those countries, as well as pissing off voters at home.

If they don't, they risk a different precedent - that the Euro economies are not acting a guarantors for each other as promised, and that there is an upper limit on how much protection they receive. Which makes Portugal, Italy, Spain and Ireland more vulnerable, and permanently weakens the Euro as a currency.

The Euro was never a license for one country to drain the coffers of others. There are responsibilities to joining the Euro as well, and Greece has flouted them since before it even joined. Having a rule-flouting Greece in the currency weakens the currency far more than kicking them to the curb.

Greece. Float your currency. EU don't back Greece's debt with euro. Debt will be written down in an eye blink.

That is the advantage of exiting the euro. Because it's such an obvious option though, it seems unlikely that they could do that and still maintain full trade relations with the EU.

You incorrectly quote me as I didn't say that, but the general complication of that plan is that the bailout debt is Euro denominated and subject to enforcement in international courts. Greece can't just elect to ignore it and/or inflate it away unilaterally. However, there have been defaulting countries before and it is not the end of the world. The problem with this strategy is that it does not produce a sugar daddy and thus still requires a restoration of fiscal sanity made all the more challenging by having just delivered a crushing blow to their own economy. The stupidity of the path they have chosen is really quite appalling.

 

[dismal]

I don't think that it is much comfort that Russia and China are hovering around with a possibility to assist.

This imaginary hobgoblin is not a particularly fearful one.

Neither Russia nor China have shown great interest in paying billions of Euros to the ECB for the privilege of funding of Greece's future budget deficits.

 

[untermensche]

Recall the current dispute is over whether Greece continues with fauxsterity or goes back to big budget blowouts. It's been in all the headlines. It's going to take new money to fund the fauxsterity, since there is no surplus that actually shows up as cash, and even more new money to fund the return to big budget blowouts.

Greece is being destroyed by anti-Keynesian idiots who don't have a clue how to turn around a failing economy.

It needs massive Keynesian spending after years of "austerity".

It is situation created by all involved but we are talking about millions of lives, not garbage.

Some care more about their anti-Keynesian economic delusions than these people.